US regulator DFS determined that the Mashreq's OFAC compliance program is adequate, with sufficient controls in place, a statement from the bank said
UAE bank Mashreq has reached a settlement with US regulators regarding its alleged conduct involving dollar transactions that primarily took place over a decade ago.
According to a statement from the bank, it has reached a settlement with the New York Department of Financial Services (DFS), the Office of Foreign Assets Control of the United States Department of the Treasury (OFAC), the Federal Reserve Board and the Federal Reserve Bank of New York.
Based on the terms of the settlement, Mashreq will pay a penalty of $100 million to DFS, the bank said.
The New York State Department of Financial Services (DFS) and the US Treasury Department stated that between January 2005 and February 2009, Mashreq sent $4 billion worth of Sudan-related payments through financial institutions in the US, thereby violating US sanctions against Sudan.
The DFS determined that the Bank’s OFAC compliance programme is adequate, with sufficient controls in place, and, therefore, did not require Mashreq to engage in any further remediation, the statement from Mashreq said.
The OFAC settlement does not include any fine or subsequent action, in part due to OFAC’s acknowledgement of Mashreq's substantial cooperation and extensive remediation of its sanctions compliance programme, among other factors.
The Federal Reserve settlement does not include any fine and acknowledges Mashreq’s commitment to compliance with US law and enhancing its OFAC compliance programme.
The settlement requires Mashreq to submit an acceptable program to ensure compliance with OFAC regulations, in addition to conducting, on an annual basis, a risk-focused sampling of dollar payments and engaging an independent third party to conduct a review of its OFAC policies and procedures.
Following the Reserve Bank’s approval of Mashreq’s OFAC compliance programme, Mashreq will have to complete a global OFAC risk assessment.
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